Energy suppliers slammed as the number of households in debt rises to more than 2million
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THE number of households in debt to energy suppliers has soared past 2million as a damning new report slams power companies for being too slow to help.
New research by Ofgem reveals the number of electricity customers in debt last year increased by 4.2 per cent to 1.31million, and by 4.8 per cent to 1.05million for gas customers.
Suppliers are bound by Ofgem rules to help customers manage debt if they are struggling to make payments, including by putting them on an affordable repayment plan.
This can also involve installing a prepayment meter but Ofgem states this must only be done as a last resort.
A prepayment meter is a device that uses a pay as you go tariff so customers pay for their energy before they use it.
But suppliers have been criticised by Ofgem for not moving quickly enough to respond to indebted customers, despite the debt level rising.
The number of customers on repayment plans rose by 1 per cent for electricity to 661,339 and by 0.4 per cent for gas to 543,520 last year.
But the amount of families in debt that weren't on a repayment plan went up by 8 per cent for electricity customers (to 648,000) and by 10 per cent for gas customers (to 505,000).
Ofgem fears that suppliers could push struggling families further into debt if they don't act sooner.
However, energy companies have been praised for offering more support for vulnerable customers.
Switch and save: Households can save hundreds of pounds by checking if they can get a cheaper deal elsewhere. In fact, MoneySavingExpert says families can save £330 on average by switching from Standard Variable Tariffs (SVTs) to a better rate. Use a comparison site like or to see what deals are available.
Get a balance transfer card: If you're paying interest on your credit card balance, this can ultimately add to your debt pile. A better option could be getting a 0 per cent balance transfer card. These types of card will let you transfer an existing balance to a new card and gives you the chance to clear it fully without incurring interest. will let you know what deals you will likely qualify for. You'll need to have a good credit rating to qualify for one.
See if you're entitled to benefits: It's important to check if you're entitled to any extra benefits or tax credits if you're struggling financially. can help you see what help is available and there's a benefits calculator on the website. Help ranges from tax credits, job seeker's allowance and universal credit.
Also consider: You can find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the and on the Government's But make sure you know exactly what you're signing up to as these plans aren't suitable for everyone. Many firms charge a fee for the service, either upfront or one that's incorporated into your monthly payments.
The number of prepayment meters forcibly installed by suppliers to collect a debt fell by 15 percent to 71,000.
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A spokesperson for Energy UK, which represents energy suppliers, said: “The energy sector is committed to improving services for all customers including those in most need, which is why we set up the independently-Chaired Commission for Customers in Vulnerable Circumstances.
“We have committed to bringing forward a new Code of Conduct to build on the Commission’s report and existing voluntary initiatives and will work closely with Ofgem on how we can improve services further for customers.”
Last week a StepChange report revealed how families are being crippled by debt with the charity receiving 331,337 cries for help in the first half of 2019.
While the National Housing Federation estimates 2.5million people can’t afford their rent or mortgage.
Back in July, it was revealed that half a million working families rely on housing benefit to pay their rent.
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